Taxes – Fast Facts

All fast facts for taxes are from the non-partisan Congressional Budget Office (CBO) and one from the Tax Policy Center. Although they represent some of their most recent reports on this subject, they do not represent all of their reports on this subject. Occasionally minor word adjustments may have been made for clarity or to reflect the updated nature of the statement. As always, verify and view statements in their full context as often as possible.

Partly offsetting tax reductions are more than $130 billion in tax increases, some of which were enacted as part of Taxpayer Relief Act of 1997 (TRA-97) companion bill, the Balanced Budget Act of 1997.  About 60 percent of the total increase comes from extending and modifying taxes dedicated to the Airport and Airway Trust Fund; another 15 percent results from raising tobacco taxes and other federal excise taxes.   Verify at Page 13
The provisions in TRA-97 that reduce federal revenues will cut taxes by a total of more than $370 billion over 10 years.  Two-thirds of that reduction will come from two sets of provisions:  the child credit and the education incentives.  Most of the remaining reduction will result from changes in estate and gift taxes, lower tax rates on capital gains, expansion of IRAs, and easing of the corporate AMT.   Verify at Page 16
TRA-97 reduces the rates on capital gains for assets held more than 18 months from 15 percent to 10 percent and from 28 percent to 20 percent.  Gains on assets held longer than 12 months but less than 18 months continued
to face the higher rates until the Internal Revenue Service Restructuring and Reform Act of 1998 eliminated them starting on January 1, 1998.  Gains on assets held for 12 months or less continue to be taxed at the rates for ordinary income.  Beginning in 2001, gains on assets held for five years or longer will face even lower rates:  8 percent for taxpayers in the 15 percent bracket and 18 percent for taxpayers in higher brackets (if the assets are acquired after December 31, 2000).   
Verify at Page 48
In reducing the net cost of college, the credits have two objectives:  to ease the financial burden on families with postsecondary students, and to enable more people to continue their education beyond high school.  The first goal will be met for all but the poorest and wealthiest families.  Verify at Page 30
A central goal of the Taxpayer Relief Act of 1997 as its name implies is tax relief.  For example, the education incentives in TRA-97 aim not only to promote increased college enrollment but also to reduce the financial burden of postsecondary education on students and their families.  Much of the tax relief is intended to help families with children.  Verify at Page 10
Although they are quite different in appearance, most current proposals for comprehensive tax reform share the following characteristics.  They would broaden the tax base by eliminating some exclusions, deductions, and credits in the current system.  They would flatten and simplify the rate structure by establishing fewer, lower tax rates and would lessen the difference in rates among different sources and uses of income.  In addition, they would move the tax base away from income and closer to consumption by reducing taxes on savings. On all but that final characteristic, TRA-97 represents a move away from comprehensive reform.  Verify at Page 91
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